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What is scoring and why you need it

Scoring

Scoring is used to rate customers according to the probability of business event or customer action, such as timely credit return, risk of default, retention or cross-sale.

With scored customers you can automatically take profitable decisions, such as accept/reject credit application, increase/decrease credit limit, send/hold cross-sale offer, etc.

Scoring technologies can be used as an objective risk management tool, which help ensure centralized, uniform, more consistent and reliable decision management across your organization.

Quality and profitability of scoring-based operational decisions can be statistically monitored and gradually improved or adjusted to new market conditions.

Scoring is the most widely used in lending for all stages of a credit life-cycle, from borrower acquisition to customer management to debt collection and recovery. Credit scoring examples will be used in these materials to display scoring techniques.